2 GROUNDS OF JUDGMENT Introduction [1] This application was filed by the Judgment Debtor (JD) dated to reinstate the Notice of Appeal of which was struck out on as both parties failed to appear before the learned Deputy Registrar. [2] Prior to that the JD had filed on an application to set aside the AORO filed by the Judgment Creditor (JC) but was dismissed by the learned Deputy Registrar on with cost RM500. [3] The parties, in this judgment, will be known as JD and JC. Background Facts [4] The JC is a credit card issuance company (that had taken over all the business, assets and liabilities of MBF Cards (M sia) Sdn Bhd by way of an order of the High Court of Kuala Lumpur of ). 2

3 [5] The JD is a Malaysian citizen, holding a MBF credit card bearing number [6] The JC filed a Notice of Bankruptcy dated (Enclosure No. 1) application at the High Court of Shah Alam against the JD for the recovery of the sum of RM36, as of The Bankruptcy Notice (Enclosure No. 2) provides the details of the claim based on the Judgment dated [7] On an Adjudicating and Receiving Order was granted against the JD. [8] The JD then filed an application dated to set-aside the Adjudicating and the Receiving Order dated with a supporting Affidavit affirmed on and was dismissed by the learned Deputy Registrar on [9] Thereafter, the JD on filed the Notice of Appeal and the hearing was fixed on (Enclosure No. 35). 3

4 [10] The JD s counsel claimed that a search was done at the Bankruptcy Registry and was informed that the said Notice of Appeal to Judge in Chambers was dismissed due to absence of parties on [11] On , the JD filed an application Summon In Chambers to reinstate the Notice of Appeal with supporting affidavits of one Kamalasan A/L Tangarajoo and one Selvam A/L Shanmugam. The JC had filed its affidavit in reply affirmed by one Mohamed Omar Bin Abu Bakar on in reply to the two affidavits of the JD namely Affidavit In Reply 1 (Enclosure No. 43) and Affidavit In Reply 2 (Enclosure No. 44). JD s Submission [12] The learned counsel for the JD submitted that its application is to invoke this Honourable Court s inherent jurisdiction and power to make the necessary order pertaining to its application to reinstate the Notice of Appeal. The counsel for the JD argued that the merits should have been heard based on the authorities, the case of Kesatuan Pekerja-Pekerja 4

5 Malaysia Shipyard & Engineering Sdn Bhd v Malaysia Shipyard & Engineering Sdn Bhd & Anor And Another Appeal [2007] 7 CLJ and the case of Gan Kim Kiat & Brotehrs Realty Sdn Bhd [1983] CLJ. [13] Based on the Affidavit of the JD, the contention was about the Creditor s Petition was not dated and therefore the judgement of consist of non-existence date. It was also submitted that the Deputy Registrar did not include the deductions that is the payment made by the JD and that the Creditor s Petition hearing was conducted earlier than the given date as in the Bankruptcy Notice. [14] The JD relied heavily on the Kesatuan Pekerja-Pekerja (supra) case submitting that the Court of Appeal in that case gave numerous opportunity to perfect the Record of Appeal and adjournment before striking out the appeal. The JD s counsel submitted that it is seeking this Court s vested power to allow its case to be heard as the said Notice of Appeal was struck out before it was heard on merits and that would be prejudicial to the JD. The JD also submitted that the JC can be compensated by way of costs and JC will not suffer prejudice as JC will have the opportunity to be heard. 5

6 JC s Submission [15] The learned counsel for the JC submitted that the JD is not entitled for this application for a number of grounds, mainly that there was an unexplained and unreasonable delay for JD to do the search and respond amounting to two months. The counsel for JC further added that none in the affidavits of the JD explained as to why the JD s counsel did not do anything for 2 months. The counsel for JC argued that the JD s defence is without merits and referred the Court to the High Court decision of Permata Chartered Merchant Bank Bhd v Hiew Fook Realty (Holdings) Sdn Bhd & Ors [1992] 1 MLJ 73. [16] The counsel for JC further submitted that there must be a reasonable explanation to the delay in reinstating the Notice of Appeal as decided in the High Court case of MBf Finance Berhad (8515-D) v Low Son Loo Soon Siong, T/A Delightful Vision Centre [2011] MLJU 379, Namun, prinsip juga mantap bahawa beberapa pra-syarat perlu dipatuhi untuk Mahkamah menggunakan budi bicaranya 6

7 meluluskan permohonan begini. Pertama, perlu ada penjelasan yang munsabah dan mencukupi untuk ketidakhadiran. Kedua, jika permohonan difailkan lewat dan di luar had masa, perlu ada penjelasan yang baik untuk kelewatan. Ketiga, pemohon perlu menunjukkan terdapat merit dalam tuntutannya. Penjelasan yang dikemukakan perlulah sekurang-kurangnya bona fide dan berasaskan kebenaran. Inilah persoalan utama yang berbangkit dalam Rayuan ini, iaitu sama ada alasan-alasan yang diberikan oleh Perayu untuk ketidakhadiran dan kelewatan harus diterima sebagai bona fide dan benar. [17] With respect to the other defences, in particular that the Creditor s Petition was defective as it was contrary to section 99 of the Bankruptcy Act 1967 as it was not dated, the counsel for the JC submitted that the Creditor s Petition was signed prior to filing and was filed two months from the date of the act of bankruptcy and the error was on the form rather than on substance. The counsel for the JC relied on the authority Joseph Phun Yeat Mun Ex Parte ABN-AMRO Bank N.V [1997] 1 LNS 210 which held that the petition although was not dated, it was presented after the act of bankruptcy and therefore the judgment 7

8 debtor was not prejudiced. The JC s counsel also referred to section 131 of the Bankruptcy Act 1967 that the defect was not substantial and argued that it does not prejudice the JD: Re A Debtor Ex P The Debtor v Bowmaker Ltd [1951] 1 CH 313. [18] The JC s counsel further submits that the petition served was regular based on the last known address as in the agreement and a search was made based on the identification card from the National Registration Department. In addition, the JC s counsel argued that this is not the proper forum to question on the service of the Bankruptcy Notice and Creditor Petition. THE COURT S FINDING [19] The JD asserted that this Honourable Court should allow its application to reinstate the Notice of Appeal as their defence is with merits based on several grounds given in the Affidavits of (Enclosure No. 40 and Enclosure No. 41). The main defence is that the delay in applying for reinstatement is due to no information received as to the status of the application of The Affidavit of the JD as 8

9 at Enclosure 40 paragraph 5 stated that there was no complete reply from the e-filing system, atas alasan peguamcara saya tidak dapat balasan sempurna daripada e-filing system yang telah dilakukan oleh peguamcara saya. This was supported by the counsel for the JD in its Affidavit (Enclosure No. 41) at paragraph 4 that the counsel did not receive notification through or update and only when they did the search at the Bankruptcy Registration Department, they found out that the Notice of Appeal was dismissed on [20] The Court heard that the Notice of Appeal was struck out due to non-appearance of the parties. This is a bankruptcy matter governed by the Bankruptcy Act It is incumbent upon the Court to accord its provisions a strict construction. Following section 5(1)(a) of the Bankruptcy Act 1967, the JC s right to serve a petition on the JD when there is a debt amounting to RM30, or more. The JC has an obligation under section 6(2) of the Bankruptcy Act 1967 to prove that 9

10 there is debt owing by the JD, that a bankruptcy action had occurred and that if the JD failed to enter appearance, the petition served is regular. [21] Upon careful perusal of the Creditor Petition (Enclosure No. 9), this Court finds that the JC had served the Bankruptcy Notice on the JD according to the correct methods, that is by way of newspaper advertisement on , by way of a notice put up at the Shah Alam High Court on and served to the JD s last known address on (at paragraph 4 of Enclosure No. 9). The Creditor s Petition stated that the JD had committed bankruptcy six months prior to the Creditor Petition served. The Creditor Petition stated that the amount due is RM36, as of and the details of deductions based on the payment made by JD dated , , , and had been included. [22] It is trite law that the Court retains the discretion to set aside an irregular judgment despite long delay as decided by the Federal Court in the case of Tuan Haji Ahmad Abdul Rahman v Arab-Malaysian Finance Berhad [1996] 1 CLJ 241 where at page 253, it remarked that, 10

11 provided it is satisfied that, (a) no one has suffered prejudice by reason of the defendant s delay; (b) alternatively, where such prejudice has been sustained, it can be met by an appropriate order as to costs; or (c) to let the judgment stand would constitute oppression. (See Attwood v Chichester [1878] 3 QBD 772; Harley v Samson [1914] 30 TLR 450. We would add that under its inherent jurisdiction to prevent an abuse of its proceedings, the Court has power to set aside a judgment in default, despite the defendant s application being out of time if the particular circumstances of the case require the intervention of the Court. (See Beale v McGregor [1886] 2 TLR 311). [23] This Court finds that the JD did not deny that it owes the JC a debt exceeding RM30, The JD s contention on the details that the JC did not include the deductions based on the payment made by the JD is untrue based on the Bankruptcy Notice (Enclosure No. 2) and Creditor Petition (Enclosure No. 9). This Court had a close scrutiny on the 11

12 Affidavits by the JD and the JD s counsel (Enclosure 40 and Enclosure 41 respectively) and found that the purported search made by the counsel for the JD was without date and no proof as to the e-filing problem that had occurred. [24] The Court finds that there was no evidence to show that the JD had raised with the service provider, Formis about the extraction problem based on e-filing system. Based on the JD s counsel s letter of (exhibit S-1 ), there was a discrepancy on how the search was made where it was stated that the JD s counsel contacted the Bankruptcy Registration Department whereas in the Affidavit (Enclosure 41, paragraph 4), it was stated that the search was made at the Bankruptcy Registration Department. I viewed that the JC s statement is more probable to be truthful that the search by JD was made only after 2 months (see Affidavit in Reply at paragraphs 13, 14, 15, 16, 17 and 18, Enclosure 44 and paragraphs of Enclosure 43) based on the affidavit evidence of the JD. [25] I find that the JD in its application for reinstatement did not offer any explanation for the delay of two months. Surely the JD in a 12

13 bankruptcy action which is a quasi-criminal in nature would want to pursue the matter promptly in appealing against the execution of a bankruptcy notice: Affin Bank Berhad v Abu Bakar Bin Ismail (Civil Appeal No.: W-03(IM)-18-02/2016. I find that the delay by the JD s counsel is unjustified and that such delay in reinstating by the counsel for the JD does not give a ground for special leave based on the Federal Court s decision of Chin Hua Sawmill Co Sdn Bhd v Tuan Yusoff Bin Tuan Mohamed [1974] 1 MLJ 58. [26] Based on section 131 of the Bankruptcy Act, the ground for the reinstatement due to defect petition on the basis of no date in the petition does not amount to substantial prejudice and should not be invalidated. I find such ground submitted by the JD unjustified for the petition to be declared invalid and I rely on the case of Joseph Phun Year Mun (supra) case attributed by the JC s counsel that such slight error does not amount to substantial injustice, thus no prejudice for the JD. [27] There were other arguments advanced by the JD but I find them inconsequential. I have answered the main ground that there was no justified reason to allow for the reinstatement of the Notice of Appeal as 13

14 there was no bona fide claim of merits on the part of the JD to warrant for reinstatement. I hereby dismiss the application with cost. Dated: 31 July 2017 (DATIN ZALITA BINTI DATO HJ. ZAIDAN) Judicial Commissioner Shah Alam High Court 14

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